How Citizens of the CIS Can Avoid Violations of the U.S. Foreign Corrupt Practices Act (FCPA)?
What is the FCPA and How is it Applied?
Foreign Corrupt Practices Act (FCPA) – is a U.S. law aimed at combating corruption outside of the United States. It prohibits U.S. citizens, companies, and third parties from giving bribes to foreign officials to obtain business advantages.
Jurisdiction of the FCPA
The unique feature of the FCPA is that it applies to:
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Any companies registered in the U.S.
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U.S. citizens and residents.
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Any foreign companies and individuals whose actions are linked to the U.S. (e.g., transferring money through U.S. banks).
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Any foreign individuals or officials committing corrupt acts under FEPA (Foreign Extortion Prevention Act).
What Actions are Prohibited by the FCPA?
The FCPA prohibits:
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Direct or indirect transfer of money, gifts, services, or other valuables to foreign officials to influence their decisions.
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Using third parties (intermediaries, agents, partners) to bribe officials.
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Promises or intentions to bribe – even discussing the possibility of transferring benefits is a crime.
Who is Subject to the FCPA?
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Citizens and companies from the CIS working with U.S. partners.
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Foreign legal entities and individuals using U.S. banks.
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Officials from any country, including CIS, accepting bribes.
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Any individuals located in third countries if they committed violations involving U.S. companies.
What Penalties Are Imposed?
Violating the FCPA can lead to:
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Huge fines (up to $25 million for companies and $5 million for individuals).
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Imprisonment for up to 20 years.
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Asset forfeiture of the defendant’s assets.
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International search and extradition to the U.S.
If authorities refuse to extradite, the U.S. can request an arrest upon entry to a third country.
How to Avoid Violating the FCPA?
1. Understanding and Compliance with the Law
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Study the basic requirements of the FCPA and FEPA.
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Familiarize yourself with local anti-corruption regulations.
2. Monitoring Contractors
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Conduct Due Diligence before entering agreements.
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Check the reputation of partners and agents.
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Document all payments and contracts.
3. Implementing an Anti-Corruption Program
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Internal controls and reporting.
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FCPA compliance policies within the company.
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Training employees on anti-corruption measures.
4. Transparency in Financial Transactions
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Document all business gifts, expenses for business dinners, and events.
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Avoid working with intermediaries who have not passed due diligence.
5. Proper Conduct in Disputed Situations
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If an official demands a bribe, document the fact (video recordings, correspondence).
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Refuse any offers that may be interpreted as bribes.
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Consult with lawyers before conducting international deals.
Conclusion
FCPA and FEPA – are powerful U.S. tools in the fight against international corruption. Ignorance of the law does not exempt from responsibility, and the penalties can be severe. Our law firm in the U.S. provides consultations and assistance in complying with the FCPA for CIS businesses.
We can help you:
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Develop an anti-corruption strategy.
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Conduct Due Diligence on contractors.
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Minimize legal risks in international transactions.
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Protect you and your business from potential corruption allegations.
Contact us today to protect your business and avoid legal issues with U.S. law!
Why choose us?
Protection from sanctions and raider attacks - We help prevent international sanctions, hostile takeovers, pressure from competitors and officials.
Deep understanding of CIS countries - We specialize in legal issues of CIS countries, know their legislative peculiarities, national traditions and internal mechanisms.
Comprehensive legal defense - We conduct business audits, minimize tax risks, protect assets and eliminate legal errors.
International legal support - Our attorneys specialize in international law, tax planning, corporate disputes and asset protection. We work with large companies, start-ups and private clients.